Start-Ups Current Affairs

Cabinet approves MoU on India-Israel Industrial R&D and Technological Innovation Fund

The Union Cabinet approved Memorandum of Understanding (MoU) to set up US $40 million India-Israel Industrial R&D and Technological Innovation Fund (I4F). The MoU was signed in July, 2017 during Prime Minister Narendra Modi’s visit to Israel.

India and Israel will make contribution of US $4 million (Rs.25 crore) each for Fund, both equivalent amount, annually for 5 years. The fund will be governed by joint Board which will consist of 4 members from each country.

Key Facts

The MoU envisages promotion of bilateral Industrial R&D and Innovation cooperation between both countries in fields of science and technology by extending support to joint projects for innovative or technology-driven new or improved products, processes or services.

Such collaborative projects will lead to affordable technological innovations in focus areas of mutual interest such as agriculture, water, energy and digital technologies. These projects will also provide institutional support in building up consortia including private industry, enterprises and R&D institutions from India and Israel.

The activities supported by the Joint I4F Fund will increase the techno-economic collaboration between both countries by investing in jointly developed technology projects and collaborations based on technological innovation.

It will encourage Israel-Indian joint projects that capitalize on both the national and global marketplace. It will provide a comprehensive set of support tools to encourage joint projects. It will foster and strengthen eco-system of innovation and techno-entrepreneurship in India and will contribute directly to the Start-up India programme.

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SEBI eases rules for angel funds

The Securities and Exchange Board of India (SEBI) has liberalised norms for angel investors to invest in early-stage entities.

In this regard, SEBI in its meeting decided to amend the SEBI (Alternative Investment Funds) Regulations, 2012.

This decision was taken based on the recommendations received from the NR Narayana Murthy Alternative Investment Policy Advisory Committee.

Decisions taken by SEBI

  • Increased the upper limit for number of angel investors in a scheme from 49 to 200.
  • Angel Funds will also be allowed to invest in start-ups incorporated within 5 years instead of the earlier norm of 3 years.
  • The requirement of minimum investment amount by an angel fund in any venture capital undertaking has been reduced to Rs. 25 lakh from earlier Rs. 50 lakh.
  • The lock-in requirements of investment made by angel funds in the venture capital undertaking has been reduced to one year from three years.
  • Such funds also have been allowed to invest in overseas venture capital undertakings. It will be up to 25% of their investible corpus in line with other Alternative Investment Funds (AIFs).

Benefits

  • This move was taken as part of its attempts to facilitate fund-raising for start-ups and help to boost investment in the early stages for start-ups in the country.
  • It will benefit start-ups looking for raising venture funding not just for the money but for the other value addition.
  • It will help start-ups raising money from a venture capital firm brings such as direction and mentorship from seasoned investors.

What is an Angel Investor?

Angel investors invest in small startups or entrepreneurs. These investors are often among an entrepreneur’s family and friends. The capital provided by angel investors to these startups may be a one-time investment to help them to propel their business or it may ongoing injection of money to support and carry starup through its difficult early stages.

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